Want to save on tax? Here are deductions you can use while filing ITR

Let’s be honest, if given a choice, none of us would like to pay tax on the income we earn. But we have to and we should, because income tax is an important source of revenue for the government. This revenue is used by the government to build the nation. India is a developing nation and very few Indians earn an income that can be taxed. This is why if you’re one of those who earn a taxable income, you should proudly and honestly pay income tax.

But having said that, there are certain ways by which you can legally reduce your taxable income that you should make use of. The government allows for certain tax-saving deductions that you can use to lower your taxable income. You can effectively use these deductions to pay less tax. The following table lists common tax-saving deductions and their limits.

Subscription to deposit scheme of a public sector or company engaged in providing housing finance

Contribution to notified annuity Plan of LIC

Subscription to equity shares/ debentures of an approved eligible issue

Subscription to notified bonds of NABARD

Rs. 1,50,000

80CCD(1B)

Additional contribution to NPS

Rs. 50,000

80TTA(1)

Interest Income from Savings account

Maximum up to 10,000

80GG

For rent paid when HRA is not received from employer

Least of rent paid minus 10% of total income Rs. 5000/- per month 25% of total income

80E

Interest on education loan

Interest paid for a period of 8 years

80EE

Interest on home loan for first-time homeowners

Rs 50,000

80D

Medical Insurance – Self, spouse, children

Medical Insurance – Parents more than 60 years old

Rs. 25,000

Rs. 30,000

80DD

Medical treatment for handicapped dependant or payment to specified scheme for maintenance of handicapped dependant

Disability is 40% or more but less than 80%

Disability is 80% or more

Rs. 75,000

Rs. 1,25,000

80DDB

Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD

For less than 60 years old

For more than 60 years old

For more than 80 years old

Lower of Rs 40,000 or the amount actually paid

Lower of Rs 60,000 or the amount actually paid

Lower of Rs 80,000 or the amount actually paid

All of these deductions are popularly known as Section 80 deductions. A taxpayer can claim the deductions that are applicable to him or her.

Apart from these, there are some other uncommon deductions also available to taxpayers. These include deductions for donations made to political parties, treatment for taxpayer suffering from physical disabilities, donations made towards social causes, etc.

These deductions have to be claimed at the time of filing income tax returns. The taxpayer is not required to attach or submit the documents related to the claimed deductions with their tax returns, but the documentation should be kept handy in case it is required by the tax department at a later date.Archit Gupta is the founder & CEO of ClearTax

Disclaimer: Views expressed are personal. They do not reflect the view/s of Business Standard.